3 Reasons ACOs Are Desperately Needed in Health Care Today


3 Reasons ACOs Are Desperately Needed in Health Care Today

As the health care industry continues shifting toward population health management and “wellness” care, the need for change is becoming increasingly clear. Fortunately, accountable care organizations (ACOs) set the stage for positive change, as they are designed to drive quality and cost-efficiency throughout the care continuum. In these uncertain times, ACOs are proving to be the refresh that is so desperately needed.

Article highlights:

  • As health care challenges escalate, the ACO model is proving to be a vital solution
  • It helps enable organizations to realize greater profits, refine processes, and enhance quality care
  • Labs have a major role in facilitating these advantages, which positions them to create value throughout their networks


Contributing Lab Leaders

Les Duncan

Les Duncan

Current Director of Operations
Highmark Home & Community Services, Highmark Inc.
Former Vice President of Accountable Care Initiatives
River Health ACO, Pinnacle Health

Michael Astion, M.D., Ph.D., HTBE

Michael Astion, M.D., Ph.D., HTBE

Medical Director, Department of Laboratories
Seattle Children’s Hospital
Clinical Professor of Laboratory Medicine
University of Washington Department of Laboratory Medicine

Richard Gentleman

Richard Gentleman

Senior Director 
National Contracting and Accountable Care Solutions

Peter Gross, M.D.

Peter Gross, M.D.

Chairman, Board of Managers
HackensackUMC ACO

Jason Bhan, M.D.

Jason Bhan, M.D.

Chief Medical Officer
Medivo, Inc.


1. ACOs enable greater profit potential

So what are these incentives that have entire institutions rethinking their approaches and restructuring their organizations?

The success of ACOs stems from the Medicare Shared Savings Program (MSSP). This program rewards ACOs that reduce costs while meeting established performance standards. If an ACO is able to stay under a predetermined spending cap while still maintaining quality standards, they are able to keep a portion of the savings.

However, shared savings also come with a level of shared risk. The amount of savings an organization is able to keep is based on which level of risk they’ve chosen. CMS offers two options:

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These financial incentives encourage providers to proactively invest in care quality in order to achieve long-term savings.

2. ACOs drive process refinement

Incentivizing organizations to streamline spending can inspire them to take a step back and look at the bigger picture. Processes and workflows that may have been successful in the past could now be outdated or inefficient. Identifying the areas for improvement can lead to major cost savings down the line.

Continued learnings

Key decision makers are looking more at evidence-based care for new ways to meet organizational goals. Fortunately, ACOs are strategically designed to capture more claims and outcome data. This can shed invaluable light on the impact of different processes. From these learnings, ACOs have clear insights on how to refine care.

Shared data

Since the organization is responsible for a patient’s entire continuum of care, it’s imperative that everyone has access to all patient data at all times. This enables HCPs to make higher quality treatment decisions on the basis of complete medical history.

One key challenge is that electronic medical records (EMRs) don’t communicate with each other, making it easy for data to get lost between parties.

ACOs often address this by consolidating IT systems. While this is a major investment in infrastructure, it empowers greater ACO outcomes by streamlining processes and providing a centralized, easily accessible platform.

Collaborative care

Because ACOs are large networks of specialists brought together through a robust infrastructure, they are aligned for high-value collaboration. By moving past the traditional siloed approach, ACO care teams are better equipped to raise the quality of care. This comes from using collective knowledge, resources and best practices. It further facilitates putting the right professional in the right place at the right time.

Closer collaboration leads to better operation. Not only are ACOs set up to do this effectively, they’re incentivized to continuously do it better.

3. ACOs put the focus on quality care

The backbone of an ACO and the ultimate goal of HCPs is always to elevate the quality of patient care. When the goal is to achieve the best possible outcomes, savings flow naturally.

This ideology aligns perfectly with population health management—it’s financially beneficial to spend money upfront to keep patients healthy. For example, ACOs that spend more on home monitoring end up spending significantly less on costly emergency department admissions. The upfront investment results in more effective care and pays itself off with major dividends. Medicare recognizes this and has built specific quality metrics into the shared savings program to ensure quality.

Quality metrics impact shared savings

The MSSP hinges on improving patient outcomes. Scores are based on 34 quality metrics and organizations must maintain certain standards to be eligible for shared savings. All 34 quality measures are categorized under four pillars:
  1. Patient/caregiver experience
  2. Care coordination/patient safety
  3. Preventive health
  4. At-risk populations


By incentivizing quality care, Medicare ensures that institutions aren’t sacrificing outcomes in their efforts to lower spending.

Wellness visits

One way ACOs are putting the focus on quality and prevention is through annual wellness visits. These proactive-care visits are paid for by Medicare and can help HCPs identify potential pitfalls before they worsen or become chronic conditions. These visits represent a major shift toward maintaining wellness—a vital component of value-based care.

Patient engagement

Keeping patients involved in their care is crucial to improving outcomes. Is someone from your organization helping your patients establish treatment goals? Identify ways to boost adherence? Choose a healthier lifestyle? Find someone that can drive them to appointments? When you engage patients in their well-being, they become invested in it. And this is a strong driver of success.

ACOs encourage institutions to invest in resources that make this a reality. These include a team of home care nurses and counselors who can help with day-to-day care needs. These professionals boost engagement, which supports better care.

How labs play a crucial role in helping ACOs succeed

Each individual piece of an ACO has dedicated roles and responsibilities, but all parties involved are working toward a common goal. As more ACOs continue to emerge, the role of the lab is proving to be a critical piece of the puzzle.

Laboratorians can contribute to the success of an ACO in many different ways:

  • Consulting with physicians
    Ensures that only the most appropriate, cost-effective tests are ordered

  • Delivering results efficiently
    Ensures care-impacting data get into the right hands in a timely fashion

  • Following up with HCPs
    Ensures critical results don’t go to waste

The future of ACOs 

Now, more than ever, institutions must do what it takes to keep up with industry demands. As these transformations continue, ask yourself what your organization can do to stay ahead of the curve and prepare for what’s next.











Additional resources

  • What is an accountable care organization (ACO)?
    By Dr. John Haughom & Dr. David Burton
    Learn the origin of accountable care organizations and steps for becoming an effective ACO.

  • Where’s the value in accountable care?
    By Neil Versel
    Accountable care is supposed to be about paying for value. But six years after passage of the Affordable Care Act heralded the shift away from fee-for-service, Dr. Greg Carroll, corporate clinical leader of GOHealth Urgent Care, has an important question: “Where’s the value?”

  • Improving laboratory operations and efficiencies
    By Lucia Berte
    Explore ways to investigate current laboratory processes and find opportunities to improve overall operations.

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